Bluestone Jewellery & Lifestyle Ltd Q1 FY27 Earnings Call: Targets Rs. 12,000 Cr Revenue, Guides 15% EBITDA Margin

Bluestone Jewellery & Lifestyle Ltd held its Q1 FY27 earnings call on July 20, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline numbers show strong growth and margin expansion

• Revenue of Rs.733 Cr — Q1 FY 2026-2027 revenue grew 49% YoY, with overall growth close to 50%.
• Pre-Ind AS EBITDA of Rs.255 Cr — rose 135% YoY in Q1 FY 2026-2027.
• Operating margin expanded 273 bps — to 7.5% in Q1 FY 2026-2027, driven by revenue scaling faster than the cost base.
• Same-store sales growth of 39% — broad-based across older and newer cohorts in Q1 FY 2026-2027.
• Gross margin expanded ~100 bps — (excluding inventory gain) in Q1 FY 2026-2027, though management downplayed the move, citing stable contribution margin as the key metric.
• New customer additions declined from 50,000 to 40,000 per quarter due to merchandise dislocation from rapid gold price increases; management reports month-on-month improvements as the issue is being fixed.

Distribution expansion and repeat customer momentum drive long-term outlook

• Repeat revenue contribution reached 60% — in Q1 FY 2026-2027, up 9 percentage points YoY, driven by an aging customer base (acquired at ages 28–32) that buys more frequently and at higher ticket sizes.
• Management targets 20% CAGR in store count — over the next four years (through FY 2029-2030), implying ~70-80 stores annually for FY 2026-2027, though not on a linear basis.
• Q1 store additions were softer — but management expects to maintain the 20% distribution growth trend for FY 2026-2027.
• Store area expanded 25.5% YoY — in Q1 FY 2026-2027, while rent expense grew 35% YoY, creating a 9.5% gap attributed to larger store sizes in Tier 2/3 cities, not higher rent per square foot.
• New stores opened in Q1 averaged ~4,500 sq. ft. — mainly in tier 2/3 cities; unit economics (rent/store, revenue/store) remain broadly unchanged.
• Competitive outperformance attributed to differentiated designs — ongoing merchandise dislocation, and a strategy of growing product offerings to match the lifecycle and increasing disposable income of repeat customers.

Scale benefits at corporate level to drive margin expansion toward 15%

• EBITDA margin target of 15% over the next four years — from 7.5% in Q1 FY 2026-2027, with the majority of improvement coming from corporate-level scale benefits, not store-level.
• In FY 2025-2026, EBITDA margin expanded by 6.5 percentage points — largely from scale (operating leverage) rather than store-level profitability improvement.
• Management argued that slower store expansion (e.g., 14-15% area growth) — would not necessarily accelerate margin improvement, because the bulk of operating leverage is at the corporate level.
• 95% of products are manufactured in-house — providing an estimated 300–400 bps margin advantage over peers who outsource, though the primary rationale is design differentiation and brand premium.
• Contribution margin has remained stable — with further scale benefits expected as revenue grows toward the Rs.12,000 Cr target over the next four years (through FY 2029-2030).

Mature store cohorts show strong turns; blended ratio expected to improve

• Inventory at end of June 2026 stood at ~Rs.2,800 Cr — management corrected that inventory did not increase by Rs.6,700 Cr; March 2026 (end of FY 2025-2026) inventory was Rs.2,650 Cr, with increases attributed to store additions.
• Older store cohorts are achieving inventory turns of 1.8–2.0x — and store-level RoICs of 40% (actual, Q1 FY 2026-2027).
• Management expects overall inventory turnover ratio to trend toward 1.7–1.8x — over the next four years (through FY 2029-2030) as store vintage expands, driving continuous improvement in returns.
• GMROI declined from 62% in FY 2022-2023 to 48% in FY 2025-2026 — driven by a growing share of new stores (lower initial inventory turns) and balance sheet inventory inflation from rising gold prices.
• Blended inventory turns expected to improve to 1.7x over the next four years — with improvement visible in FY 2026-2027.

Government customs duty hike and gold price trends shape near-term backdrop

• Government's customs duty on gold moved from 6% to 15% — during Q1 FY 2026-2027, cited by management as a key backdrop.
• Demand softened in May after the import duty hike — but normalized by June, with the same trend continuing into July.
• Management does not view gold inflation as a headwind for H2 FY 2026-2027 — noting that Q3 FY 2025-2026 saw gold rise ~80% and Q4 FY 2025-2026 ~60-65%, yet that period was the slowest quarter in the company's history. Range-bound gold is considered favourable.
• Hedging policy remains unchanged at 50% — based on risk management objectives (liquidity, capital structure, P&L impact), not on gold price predictions. Applies only to gold, not diamonds.
• Exchange volumes in Q1 FY 2026-2027 are elevated — compared to prior periods, partly due to import duty hikes; rising gold prices have driven higher exchange volumes over time.
• No material shift in studded jewellery sales observed in the softer gold price environment; studded mix for Q1 FY 2026-2027 was 57%.

Long-term revenue target of Rs.12,000 Cr; marketing spend to trend lower

• Revenue target of Rs.12,000 Cr over the next four years — (through FY 2029-2030), from Rs.2,440 Cr in FY 2025-2026, driven by ~30% mature-store SSG compounding plus 20% area expansion.
• Management reiterated the long-term target of ~30% same-store sales growth (SSSG) — over the next four years (through FY 2029-2030).
• Marketing spend as% of revenue expected to decline to 4.5–4.6% over the next five years — from 6.9% in Q1 FY 2026-2027; full-year FY 2026-2027 marketing spend (as% of revenue) is expected to be lower than 6.6%.
• Management expects new customer acquisition to recover — as the merchandise dislocation from rapid gold price increases is resolved at scale.
• Customer AOV for Q1 FY 2026-2027 was Rs.78,000 — repeat customer AOV is typically 20-30% higher than new customer AOV, based on FY 2025-2026 data.
• Q3 FY 2025-2026 was the slowest quarter in company history due to extreme gold volatility; management expects range-bound gold to be favourable for demand in H2 FY 2026-2027.